Following long-duration storage is like rooting for a home team that’s always about to win next year.

Lithium-ion batteries utterly dominate grid storage deployments these days. That’s great for the cost decline narrative, in the way that cheap Chinese photovoltaic cells produced a massive expansion in solar deployments. But cost obsession results in technology lock-in, boxing out other tools that could prove useful or even better if given the time and space to grow.

It also makes for homogeneous storylines: In other news, the latest energy storage plant looks and performs exactly like all the other ones; check back as this story develops.

There are good reasons to root for the scrappy upstarts challenging the conventional wisdom and building alternative technologies to store clean energy for days, as will be needed for renewables-heavy grids. But the last decade has seen the long-duration storage field make outlandish promises and instead deliver bankruptcies or a slow-rolled smattering of small demos.

This year, the remaining entrepreneurs gave us something different: signs of financial sure-footedness and tangible steps toward long-awaited scale. At the same time, the mainstream storage industry reminded the world of the value of different, more fire-resistant technologies.

This is still more windup than pitch, but just wait for next year.

1. Cash like never before
   Investment tallies provide an indirect measure of long-duration storage startups’ prospects but a crucial one nonetheless. And this year delivered windfall investment for leading entrants in this space.

Energy Vault made the biggest splash, pulling in $110 million from SoftBank’s Vision Fund this summer. That marked the single largest equity investment in a stationary storage company, according to Wood Mackenzie’s investment database (battery companies targeting electric vehicles have raised bigger rounds).

SoftBank’s judgment took a reputational hit when star investment WeWork imploded this fall, and it doesn’t have a track record of storage picks. But the money stands: Energy Vault has gobs of cash to construct its initial pipeline of gravity-based storage plants, which use a futuristic automated crane to stack and lower massive blocks. That’s not a sentence Greentech Media could have written a few years ago, when the litmus test for a promising long-duration storage company was mere survival.

Ten teams working to drive down the cost of long duration storage are competing in a way, using federal grant support to make enough progress to earn a follow-on grant for pilot-scale production. Projects include a sulfur flow battery for full-week backup capability, and a more efficient means of converting electricity to hydrogen and back again.

Each project aims toward a goal of 5 cents/kWh for storage that can last for days, under the DAYS program of the U.S. Department of Energy’s Advanced Research Projects Agency (ARPA-E).

Here are highlights of the ten projects, spanning corporate, university and hybrid teams.

Sulfur flow batteries

Flow batteries use electricity to produce an electrolyte, which may be stored separately from the battery. The electrolyte is later “flowed” through the battery to generate electricity. As a result, long-duration storage using flow batteries requires only a large storage capacity for electrolyte.

Form Energy aims to achieve “full-week backup capability” with a sulfur flow battery “at a factor of 10 or greater cheaper” than lithium-ion batteries, said company co-founder Marco Ferrara in a video posted by global utility Enel. Form Energy may ultimately pilot its battery technology in a joint project with Enel.

“Aqueous sulfur flow batteries represent the lowest chemical cost among rechargeable batteries,” says Form Energy’s grant award notice, but have low efficiency. To improve efficiency, the firm is working on anode and cathode formulations, membranes and physical system designs.

A United Technologies project is focused on sulfur and manganese flow batteries, and has three project partners: Lawrence Berkeley National Laboratory, MIT, and Pennsylvania State University. The project aims to “overcome challenges of system control and unwanted crossover of active materials through the membrane.”

Electricity to hydrogen

A team at the University of Tennessee, Knoxville aims to improve the efficiency of the round-trip process of converting electricity to hydrogen and back again. The current process uses electricity to power an electrolyzer to convert water to hydrogen and oxygen, and then uses the hydrogen and oxygen in a fuel cell to produce electricity and water.

“It has long been a goal to make a regenerative fuel cell, a single device that functions as both a fuel cell and an electrolyzer,” said lead researcher Dr. Thomas Zawodzinski, as quoted in a university press release. “However, such devices have previously suffered from poor overall efficiency. The new project uses an alternative approach by changing one of the chemical reactions in the cell and bypassing the efficiency bottleneck.”

What a difference a decade can make. In 2010, batteries powered our phones and computers. By the end of the decade, they are starting to power our cars and houses too.

Over the last ten years, a surge in lithium-ion battery production drove down prices to the point that — for the first time in history — electric vehicles became commercially viable from the standpoint of both cost and performance. The next step, and what will define the next decade, is utility-scale storage.

As the immediacy of the climate crisis becomes ever more apparent, batteries hold the key to transitioning to a renewable-fueled world. Solar and wind are playing a greater role in power generation, but without effective energy storage techniques, natural gas and coal are needed for times when the sun isn’t shining or the wind isn’t howling. And so large scale storage is instrumental if society is to shift away from a world dependent on fossil-fuel.

UBS estimates that over the next decade energy storage costs will fall between 66% and 80%, and that the market will grow to as much as $426 billion worldwide. Along the way entire ecosystems will grow and develop to support a new age of battery-powered electricity, and the effects will be felt throughout society.

Changing electrical grid
If electric vehicles grow faster than expected, peak oil demand could be reached sooner than expected, for instance, while more green-generated power will alter the makeup of the electricity grid.

In a recent note to clients, Cowen analysts said that the grid will “see more changes over the next ten years than it has in the prior 100.”

The growing energy storage market offers no shortage of investing opportunities, especially as government subsidies and regulations assist the move towards clean energy. But like other highly competitive markets — such as the semiconductor space in the 1990s — the battery space hasn’t always provided the best return for investors. A number of battery companies have gone bankrupt, underlining the fact that a society-altering product might not reward shareholders.

“Eventually this will come down to some industry leaders who make some money,” JMP Securities’ Joe Osha said. “I think all these companies are going to do a good job of delivering declining prices for [electric vehicle] manufacturers over the course of the next 5-10 years. I am not so sure that they are going to generate great stockholder returns in the process.”

Energy storage is a rapidly growing segment of the clean energy sector, and prices are dropping fast. Yet many are still struggling to understand how to value energy storage as an investment.

As a growing number of cities, states and businesses commit to 100 percent clean energy, storage is already playing a pivotal role in determining how they will meet these targets. Wood Mackenzie’s latest Global Energy Storage Outlook projects that deployments will grow 13-fold over the next six years, from a 12-gigawatt-hour market in 2018 to a 158-gigawatt-hour market in 2024.

This emerging market represents a huge opportunity. Global investments of $374 billion a year will be needed to upgrade the grid with enough flexibility to account for the variable power generation profiles of renewable technologies like solar and wind. Storage solutions are now a growing part of this energy transition and will represent a $150 billion industry in the U.S. alone by 2023.

However, massive deployment numbers and dropping costs won’t streamline project finance for energy storage in the short term. As a nascent industry, battery storage lacks historical data, requiring investors and lenders to familiarize themselves with its unique qualities.

Installing storage, whether as a standalone asset or by adding it to an existing utility power source, is highly individualized from one project to another. So extrapolating risk and returns from any given asset is not straightforward. Each project draws power from a unique generation source (renewable or traditional power plants) and is interconnected to a regionally regulated power market and a unique revenue stream.

Some storage projects are able to generate income both while charging and deploying energy, while others are focused just on deployment. There are also interconnection considerations depending on how and where your storage project plugs in. Are you directly charging from the grid? From a solar or wind farm or some other standalone generation facility?

Another consideration for investors is that batteries in a storage project have shorter lifespans of 10 to 15 years versus solar or wind energy assets that may last twice as long. And similar to PV modules, which lose efficiency as they age, it’s critical to understand the factors that impact a battery’s ability to store energy as it ages and to factor in the cost of replacement as needed. Understanding the intricacies of asset management and optimization is highly complex, but it is necessary in order to adequately mitigate risk for each storage portfolio.

To realize the full potential for the investment markets and the global energy transition, it’s critically important to understand the entire value stack that integrated storage brings to the table.

In August, we published the top 10 utility regulation trends of 2019 — so far. With 2019 wrapping up, we look at the 10 trends and actions that stand out above the rest.

From the falling cost of renewables and storage driving utilities’ resource planning, to the realignment of utility performance incentives with evolving policy goals, it was a busy year.

Below is an executive summary of the complete roundup, which has specific examples of state public utility commission action. (You can read AEE’s full version with details and links to proceedings here.)

1. Implementing 100% clean energy commitments
   As renewable energy and energy storage resources become increasingly cost-competitive, states have become more ambitious in their clean energy targets. At least 13 states plus Puerto Rico and Washington, D.C. have now set 100 percent clean energy targets.

Washington, D.C. codified the most aggressive target, setting 2032 as the deadline for powering its grid with 100 percent renewable energy. A few others, including Illinois, Maryland, Michigan and Oregon, have announced initial plans to transition to 100 percent clean energy.

In addition, at least six investor-owned utilities — Avista, Duke Energy, Green Mountain Power, Idaho Power, Public Service Co. of New Mexico and Xcel Energy — operating in 12 other states have committed to 100 percent clean energy targets.

While the requirements, timelines and implementation mechanisms may differ, one trend is clear: There’s nothing alternative about advanced energy anymore.

1. Falling cost of renewables and storage drives resource plans
   In most states, it is now often cheaper to build new wind and solar plants (in some cases even when paired with storage) than to operate existing fossil-fuel power plants.

The data bears this out. The average levelized cost of energy for large-scale solar PV and onshore wind without subsidies is now as low as $32 and $28 per megawatt-hour, respectively. This compares favorably to the marginal cost of operating existing coal plants — now at about $33 per megawatt-hour. Falling costs have led to an estimated $2.6 trillion in new investments in clean energy, as defined by Bloomberg New Energy Finance, in the past decade.

Renewables are now dominating utility long-term planning, as we saw this year in Colorado, Georgia, Indiana, Michigan, Mississippi, New Mexico and Utah.

Whelp, it looks like the US coal industry is going to end the 2010s the way it started. Back in 2009, US coal producers probably didn’t know they were staring down at the bottom of an abyss fueled by natural gas and renewable energy — or if they knew, they weren’t telling. Now that the 2020s are here, a major new threat to coal is taking shape in the form of long-duration energy storage. And it’s happening in Vermont, of all places.

Aside from hydropower dams and “water batteries,” no utility-scale storage technology on the market today can provide the long-duration standard of 10 or more hours. That goal has been set by the US Department of Energy, which would actually prefer a duration range of up to 100 hours but will settle for 10, for now.

Lithium-ion batteries are currently the go-to technology for energy storage, but they only provide for a few hours at a time. Scaling up an Li-ion array with staggered discharge times could be an option, but it’s not particularly cost-effective.

Meanwhile, the Energy Department is aggressively seeking long-duration, utility-scale batteries for two related reasons, neither of which spells good new for coal, or for that matter, natural gas.

First, more energy storage translates into more grid integration for renewables, which is another target of the Energy Department, despite anti-renewable mutterings from 1600 Pennsylvania Avenue.

Second, more grid integration for renewables means a greater need for modern grid services that provide for flexibility and resiliency, which can be fostered by utility scale energy storage.

More Energy Storage For Vermont
That brings us to Vermont. The UK company Highview Power is bringing its long-duration energy storage technology to Vermont in partnership with one of the top 20 solar developers in the US. That would be Vermont-based Encore Renewable Energy. For those of you keeping score at home, Encore won the #19 slot in Solar World’s “Top Solar Contractors” list.

The new project makes it clear why the Energy Department is eyeballing long duration energy storage for the sparkling green grid of the future. Highview’s big new battery will allow for bringing more renewables into the Vermont grid and that’s just for starters.

As described by Highview, the new battery will also provide market arbitrage, synchronous voltage support, frequency regulation and reserves, synchronous inertia, black start capabilities, and other services that monetize the facility while efficiently balancing electricity supply and demand.

In Michigan, we’re lucky to have one of the largest pumped storage facilities in the world. At the Ludington Pumped Storage facility, water is transported uphill when cheap excess electricity is available and allowed to flow back downhill through a turbine when electricity is needed. Despite its clear value to the grid and to the increased integration of renewables, the 1,872-megawatt facility took four years to build and is unlikely to be replicated.

Instead, the greatest expansion in energy storage over the last decade has been in batteries. Utility-scale battery storage capacity has soared over the past 10 or so years, from almost nothing before 2010 to nearly 1,000 megawatts today, driven in large part by lithium-ion battery storage, the price of which has fallen 85 percent since 2010. There has also been growth in the number of energy storage projects outside of lithium-ion batteries, such as compressed air energy storage and flywheel storage.

But despite the value of pumped storage in the state’s energy mix, Michigan has been slow to adopt these booming new energy storage technologies relative to the growth seen on the coasts.

This is unfortunate, because, as revealed by the Michigan Public Service Commission’s (MPSC) recent State Energy Assessment, Michigan’s energy system is not as resilient as it could be. Storage could help.

Michigan ranks near the bottom of all U.S. states in terms of electric reliability due in part to harsh summer thunderstorms and bouts of extreme winter freeze, but also due to aging infrastructure and outdated systems. Energy storage allows the grid to tap power at will and store power in times of excess and so represents a massive opportunity to shore up reliability and resiliency.

By shifting electric demand to off-peak times and keeping the grid stable, storage can serve as an alternative to old ways of upgrading the grid. Utilities may not need to charge ratepayers for as many distribution-level projects like new power lines or transformers because many of those projects may not be needed if energy storage is deployed appropriately. Several states have required utilities to analyze these “non-wires alternatives” before spending ratepayer dollars on large distribution grid upgrades.

The disparity between Michigan and other regions when it comes to energy storage can be explained in part by policy hurdles. The problem is multifaceted, involving state regulations and utilities as well as the wholesale market.

A congressional subcommittee has advanced three energy-related bills that push for technological innovation in geothermal energy development, battery storage, and power grid modernization—innovations that could help to slow greenhouse gas emissions.

One of the bills, the Advanced Geothermal Research and Development Act of 2019 (H.R. 5374), “takes important steps toward advancing a woefully underutilized source of energy,” said Rep. Sean Casten (D-Ill.) at the 19 December markup of the legislation by the Subcommittee on Energy of the House Committee on Science, Space, and Technology.
The legislation, which was introduced by the full committee’s ranking member Rep. Frank Lucas (R-Okla.), was approved with bipartisan and unanimous support, as were the other two bills. The bills now go to the full committee for consideration.

Geothermal energy, which is literally heat derived from Earth, contributes to just 0.4% of electric power generation in the United States, according to the Energy Information Administration of the U.S. Department of Energy (DOE). Although the United States already generates more total power from geothermal sources than any other country, proportionately, it pales in comparison with geothermal leaders like Iceland, which gets 26% of its total electric power generation from geothermal, according to a report by the Atlantic Council, a Washington, D.C.–based think tank.

A 30 May DOE report, GeoVision: Harnessing the Heat Beneath Our Feet, noted that there is enormous untapped potential for geothermal electricity generation in the United States from “vast and geographically dispersed” resources. These resources aren’t just located near volcanically and hydrothermally active areas like Yellowstone National Park; rather, the report stated, “Shallow-earth resources exist across all 50 states and can be used for [geothermal heat pumps] wherever the ground can be cost-effectively accessed to depths below seasonal temperature variations.”

The report found that by 2050, geothermal power generation could increase more than 26-fold from today and reach 60 gigawatts of installed capacity, providing 8.5% of all U.S. electricity generation. However, “challenges in resource exploration, drilling, and development present fundamental barriers to improved economic capture of geothermal resource potential.”

Texas is carving out a leadership position in adopting large-scale battery storage as battery prices fall, technology improves and electricity demand grows, potentially paving the way for renewable power to dominate the state’s energy mix.

The amount of storage on the state’s power grid is still small — just 100 megawatts in a system with a generating capacity of nearly 80,000 megawatts — but is expected to more than triple to about 360 megawatts in 2020 and grow even faster in coming years. The state’s grid manager, meanwhile, is considering proposals to develop some 7,200 megawatts of large-scale battery storage within the next five years or so, exceeding the amount of natural gas generation in the pipeline.

“It’s a stunning development,” said Sam Huntington, an analyst specializing in battery storage for the global consulting firm IHS Markit, “and nothing anyone would have predicted a couple years ago.”

While only a fraction of proposed generation projects typically get built, Huntington said the flood of battery proposals indicates where the market is headed. Texas, meanwhile, has become one of the leaders in grid-scale storage, in part because it can design policies without waiting for the Federal Energy Regulatory Commission, where a contentious rule-making process for deploying batteries on the grid is underway. The Texas power grid, which is not interconnected with other state systems, does not fall under FERC’s jurisdiction.

In Texas, which ranks fourth among states in installed battery capacity, regulators are wrestling with broad, first-time issues such as how to treat energy resources that both draw and generate power and more mundane interconnection concerns of how to effectively and efficiently link batteries from wind farms, solar farms and stand-alone storage units to the grid. At the same time, the opportunity that energy storage provides is driving the value of renewables higher.

Wind energy, for example, generates vast amounts of power at night, when winds in West Texas are at their strongest, but electricity consumption — and prices — are at their lowest. Batteries would allow wind generators to store that power and sell it in the afternoon hours, when demand and prices are at their peak.